Wednesday's Personal Finance stories

Main Street investors must constantly resist the temptations of the moment. That takes discipline in adhering to well-thought-out, long-term goals and strategies. But discipline is something that is in short supply among most U.S. market participants, especially when there is a run in one sector or another.

This isn't just about the piling on into the dot-com and tech sectors in the late 1990s. The outcome of that strategy is all too apparent even today. It's also about how investors can cost themselves big chunks of their gains, or exaggerate their losses, by moving in and out of heating or cooling sectors. And that long-term damage isn't always easy to see.

Emotions, though, are a hard thing to keep in check. Admit it: If you haven't already, you'd really like to load up on gold and other commodities, energy stocks, emerging-markets ETFs and -- just for a little more excitement -- REITs. You've heard or seen these sectors leap in recent months and you'd like in -- or want in for more. You can see the problem with the logic, but it doesn't make the desire go away.

Our lead story looks at the hot energy and commodity sectors and explains why you should exercise extreme caution just now. Read John Spence's Mutual Understanding column, plus see how you can learn powerful money-management lessons from the big institutional market players such as pension funds and find out from Thomas Kostigen who is trying to capitalize on the big distribution from the Fidelity Magellan fund, on Wednesday's Personal Finance pages.

If you really feel the need to jump into something, try the automobile sector. That's been the worst performer over the last two years and three years. You can turn the ignition on your own bandwagon.

Steve Kerch, assistant managing editor/personal finance

INVESTING

Energy, commodities the new dot-com stocks

Investors piled into high-flying technology and dot-com funds in the late 1990s like lemmings over a cliff, and now some analysts see a bloody sequel but with commodities, real estate and international stocks recast as the sirens luring performance-chasers into the abyss. See Mutual Understanding.

What institutional investors can teach you about picking money managers

Big institutional investors are different from you and me. But that doesn't mean we can't learn from the way they handle money. See Life Savings.

China 'magnet' exerts strong pull on neighbors

The bull in China's shop is on a strong run this year, and the economic boom is pulling neighboring countries along. But investors enamored with the region should keep in mind that China's growth engine rides a narrow gauge, and markets across Asia would feel a sharp jolt if it derails. See Mutual Understanding.

Investing in China no easy task

In my weekly commentaries, I frequently hit on recurring themes that investors in China-oriented companies would be remiss to ignore. MarketWatch's survey of Investing in Asia provides a good opportunity to look closer at a few of the unique aspects of China's often-chaotic market and how investors can mitigate some of the inherent risks. See Sage Brennan.

Big fund payout gives managed-account competitors an opening

Fidelity's massive Magellan Fund recently informed its shareholders to watch out -- they're going to have capital gains taxes to pay. The announcement has drawn attention anew to the Achilles heel of the mutual fund structure itself: investors' lack of knowledge and control over individual holdings. See Sophisticated Investor.

Don't just do something, sit there

The newsletter that is in 5th place for performance over the past 18 months is the Closed End Country Fund Report. According to the Hulbert Financial Digest, it has produced a 52.4% annualized return over this period, in contrast to 14.7% annualized for the Dow Jones Wilshire 5000 index. What makes this performance worthy of a column? Because the newsletter has not been published at all during this entire time -- not once. See Mark Hulbert.

TAXES

What the tax bill means for you

Rather then cutting your taxes, the Tax Increase Prevention and Reconciliation Act of 2005, which Congress passed last week and which the president is expected to sign today, mostly extends benefits that were set to lapse. Mark Luscombe, principal analyst for tax-book publisher CCH, says there are a few things taxpayers should keep in mind: See Marshall Loeb's Daily Money Tip.

Research shows fighting IRS is often worth it

So you've filed your tax return. Now comes nail-biting time, as you pray that the Internal Revenue Service's plans to increase the number of audits this year won't include you. But even if you are audited and are hit with additional taxes and penalties, a new government report shows your chances of getting those charges reduced -- or even eliminated -- may be better than you think. See Tax Report.

CONSUMER

Energy, shelter costs push April CPI higher

Energy prices pushed the U.S. consumer price index up 0.6% on a seasonally adjusted basis in April, the Labor Department said Wednesday. And higher shelter costs boosted the core CPI index, which excludes food and energy prices, to a 0.3% gain. See Economic Report.

HEALTH CARE

Senators seek to waive drug-plan late fee

Top senators said they expected to see quick action on legislation that would waive late fees for seniors who failed to sign up for the Medicare prescription-drug plan by the Monday enrollment deadline. See full story.

CAREERS

Why Mr. Kiss-up keeps getting ahead

It's one of the most enduring mysteries of the workplace: How can talented people languish in their jobs unrecognized and under-compensated while others, some seemingly dumb as a stump, thrive and rise? The answer lies largely in a skill often cited by experts as one of the greatest determinants of career success: "Managing up" -- more or less the ability to influence your boss to invest in your ideas and advancement. See story from CareerJournal.

Marketing a consultant as an interim exec

Joe Jobseeker's forte is helping start-ups get to the next level through strategic planning and marketing. Doing the same for himself, he says, is another story. See Resume Makeover.

Employers want M.B.A.s with quality work experience

Market loses steam but prices still go up

It is becoming apparent that the demand for residential properties, while still fairly healthy, is losing steam. See Real Estate Blog.

Save money by researching the tax climate before moving

Considering moving to another state for work or retirement? It pays to consider how state taxes will affect your income -- and your heirs. See story from RealEstateJournal.

Demand slows for mortgages and for consumer loans

Banks reported continued slowing in demand for consumer and mortgage loans in recent months, but the pace of slowing for mortgages appeared to ease, according to a Federal Reserve study. See story from RealEstateJournal.

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